We had a near financial collapse this week that was at least temporarily averted before we had widespread runs on banks. The US government is trying to formulate and get congressional approval for an extremely expensive bail out of many big-time financial institutions but it is not clear that these measures will stop the madness.

Actually, from my perspective, this isn't madness but we have had a lot of panic. And for good reason. If you think your personal bank might fail or your money market account can't keep your money safe, you panic. We had that this week.

The bail out proposed this week is bigger than anything since the Depression. That should be a hint that we are facing devastating financial conditions. The bail out is proposed to avert what looks to the Fed and Treasury as the possibility of a worldwide financial collapse that will stop the economies of the world, trash the bond and stock markets and throw many millions out of work.

Unfortunately, the US government will be signing up for a huge financial liability now that could easily double our national debt. Amazingly that fact seems to be the lesser evil. I recommend you make sure you know a lot about where your money is and how it is invested. I've personally spent several hours this week on financial matters. It is not pretty.

Denial is futile. Worry is appropriate. Homework is a good place to start. You may want to further safeguard your assets. I pulled a few hundred dollars out of my bank so far. Haven't moved any of my investments.

Keep in mind that if you own a lot of stocks that have dropped in value and you sell low and buy something safe like treasuries, gold, CDs, you won't be able to get in on the recovery of those stocks. The advantage of selling out is if the market goes down a couple thousand more points, you will have sold high relative to the absolute bottom and could in theory buy in lower, ameliorating your losses.

The little guy rarely has command of the details of his or her finances to the point where he or she can buy and sell at just the right times. That's why I haven't sold anything. Not enough information and no way to make a transaction faster than the hedge and pension funds (or even the day-traders) who are equipped to move fast and have the best information.

That's why buy and hold was invented. The reason you are told to keep some liquidity by having a good-sized chunk of your holdings in cash is so you can avoid having to sell your stocks and mutual funds when they are down. With any luck, eventually we will work through this financial quagmire and good times will bring your stock values back above where they are now (the Dow closed at 11388 on Friday after two good days).

I'm extremely concerned about the likelihood that a rushed situation will open up lots of room for corrupt deals made at the expense of the American taxpayer. Deals are going to have to be struck and I'm worried how these will be reviewed and purged of politically expedient or corrupt practices. The market isn't working but I'm afraid the government isn't exactly a paragon of virtue. Seems like big players will muscle in or at least lean on people to get their fair or more than fair share out of all this.